“Gross margin grew by 2.7 pp y-o-y to 26.0%, while EBITDA margin increased from 7.1% in 2016 to an impressive 9.5% for 2017. Eurotorg delivered a net pro t of BYN 102.5 million in 2017, with a net profit margin of 2.6%.”

“Capex-Light” Expansion

Eurotorg increased its number of stores to 50o by year-end, an increase of 10.4% year-on-year, with total selling space rising by 2.9%.

Zubkou added that going forward, the business will be looking to implement a “capex-light growth strategy”, with the focus on “opening smaller-format stores in leased premises”. Last year, capex accounted for just 1.2% of revenue.

According to Eurotorg, its medium-term strategy is to focus on smaller format stores, as well as to expand its regional presence - in 2017, it entered 20 new cities and towns across Belarus.

“The company will continue the expansion of modern formats across all regions of the country, providing new customers with access to a high-quality assortment at affordable prices.”

Looking Ahead

Having “significantly strengthened” its financial position last year, on the back of a Eurobond placement last October that improved its debt maturity profile, Eurotorg is confident of maintaining a strong growth trajectory this year.

“All of these factors, combined with the positive outlook for the Belarus economy, accelerating real wage growth and the strong fundamentals of the Belarussian food retail market, put Eurotorg on solid footing to continue operating profitably while implementing a sustainable growth strategy that will bring modern retail to even more people across the country,” said Zubkou.

He added that from a growth perspective, the company is “reviewing all strategic options” including a potential IPO, “depending on market conditions”.

Eurotorg LLC entered the Unified State Register of Legal Entities and Individual Entrepreneurs under No. 101168731 on the resolution of the Minsk City Executive Committee on September 7, 2000 No. 1030. All rights reserved.